A specialist trader works at a post that trades AstraZeneca on the floor of the New York Stock Exchange yesterday. Pfizer said yesterday it wants a blockbuster tie-up with AstraZeneca to fuel cancer research, taking its merger hopes public after the British company rejected earlier overtures worth almost $100bn (€72bn).
European stocks rose yesterday with the pharmaceuticals sector given a shot in the arm by news of US giant Pfizer’s $100bn merger offer for British rival AstraZeneca.
Drugmakers were also lifted by impressive earnings from Germany’s Bayer and upbeat news from France’s Sanofi.
London’s benchmark FTSE 100 index of leading companies advanced 0.22% to 6,700.16 points at close.
Frankfurt’s DAX 30 gained 0.48% to 9,446.36 points and in Paris the CAC 40 added 0.38% to 4,460.53 compared with Friday’s closing levels.
Pfizer said yesterday it wants a blockbuster tie-up with AstraZeneca to fuel cancer research, taking its merger hopes public after the British company rejected earlier overtures worth almost $100bn (€72bn).
In reaction, AstraZeneca’s share price surged 14.38% to 4,666.5 pence, bringing the FTSE up along with it.
Rival drug makers GlaxoSmithKline and Shire Pharmaceuticals climbed 0.82% and 2.37% to stand at 1,668.55 pence and 3,286pence, respectively.
“It was the pharmaceutical sector that was still the talk of the market with GSK, Shire and AstraZeneca all leading the FTSE,” said Farhan Ahmad, trader at brokerage Tradenext.
“Pfizer is still perusing the takeover of AstraZeneca.... With the prospect of one of the largest ever takeovers in the sector, AstraZeneca shareholders could be tempted.”
Chemicals and pharmaceuticals giant Bayer, maker of Aspirin, added yesterday it turned in a better first-quarter performance than expected thanks to healthy growth driven by new products.
Net profit rallied 23% to €1.42bn ($1.96bn) between January and March, compared with a year earlier.
In Paris, French drugs group Sanofi revealed it had successfully completed the first of two Phase III clinical studies of a proposed dengue vaccine. That sent its share price jumping 1.75% to €76.75.
In New York, Wall Street was mixed in mid-day trading, with merger talk pushing the Dow Jones index up 0.21% but concerns over the share prices of major tech stocks dragging the Nasdaq down 0.66%.
The chatter on a possible Pfizer-AstraZeneca merger boosted the British pound, which was also lifted by expectations of strong first-quarter economic growth data on Tuesday.
Sterling ended at $1.6815 after earlier hitting the highest level since November 2009, $1.6858. That compared with $1.6798 on Friday.
“The news that Pfizer has once again attempted to strike a deal with AstraZeneca is having a positive effect on sterling,” said Kathleen Brooks, research director at trading site Forex.com.
“The reaction in the market could be expectation that Pfizer will have to increase its offer for AstraZeneca.”
The euro rose to $1.3845 from $1.3832 late in New York on Friday. The European single currency firmed to 82.34 British pence from 82.32 pence.
The euro firmed to ¥141.90 from ¥141.36, having reached 142.15, the highest for three and a half weeks.
However, the Swiss franc rose to 1.2193 to the euro and 0.8806 to the dollar.
On the London Bullion Market, the price of gold fell back after early gains to close at $1,299an ounce from $1,301.25 on Friday.